Synergy Capital Markets

The travel and hospitality industries comprise the world’s largest and most dynamic market, accounting for more than $10 trillion in global annual economic activity. This massive segment of the global economy incorporates a variety of companies that specialize in specific industry segments, but just five sectors—food service, cruise lines, lodging, gaming, and airlines—account for the majority of this activity, and represent more than $850 billion in annual revenues in the United States alone. Synergy Capital Markets is specifically focused on these sectors as the relate to the "Hotel" and "Hospitality" market.

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At Synergy Capital Markets, our strategy is to leverage the experience of the entire SJM Capital Family family to provide entrepreneurs with unequaled counsel and strategic insights to drive growth and adoption across the entire Hotel and Hospitality industry. With each portfolio company, we partner with other investment firms, and add value through our deep sector knowledge and relationships throughout the Hotel & Hospitality Industry.

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Everyone knows what the "Hotel" industry is comprised of, but the term "Hospitality" is not as well known. The Hospitality Industry covers a broad category of fields within the service industry that includes lodging, event planning, theme parks, transportation, cruise line, and additional fields within the tourism industry. The hospitality industry is a multi billion-dollar industry depending on the availability of leisure time and disposable income. A hospitality unit such as a restaurant, hotel, or an amusement park consists of multiple groups such as facility maintenance and direct operations (servers, housekeepers, porters, kitchen workers, bartenders, management, marketing, and human resources etc.).

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Vacancy rate is an important variable for the hospitality industry. Hotels and theme parks seek to maximize the number of customers they “process” in all sectors. This led to the formation of services with the aim to increase usage rates provided by hotel consolidators. Information about required or offered products is brokered by vendors as well as purchasers. Looking at various industries, “barriers to entry” for newcomers, and competitive advantages between current players is very important. Among other things, the hospitality industry players find advantage in old classics (location), initial and ongoing investment support. The authenticity, professionalism, and actual concern for the happiness and well-being of the customers by successful organizations are a clear competitive advantage.

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Fostering Growth without Diluting Equity:

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For Hotel & Hospitality Industry companies at critical stages of development, debt can serve as a key financing option to foster growth, with minimal dilution of equity ownership. At Synergy Capital Markets, not only do we understand the industries of our portfolio Hotel & Hospitality Industry companies, but we also understand the growth process - and occasionally the growing pains - they undergo.

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When venture debt is used appropriately, we believe entrepreneurs gain the following benefits:

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• Able to raise capital in a way that benefits the team and the business as a result of the greater flexibility offered by venture debt than traditional forms of debt financing

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• Have more time between equity rounds to build the business and achieve critical milestones, which creates potential for greater valuation

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• Retain a larger ownership stake in the company prior to an IPO or other liquidity event

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• Achieving milestones quickly in many cases also means reaching the IPO stage more rapidly

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